Political Battle Lines Form Over Tax Cuts

Published 1:57 pm, Monday, April 25, 2016

Less than a week after the new Congress convened under Republican control, political lines are forming over tax cuts and judicial appointments that rank among President Bush's top priorities.

The White House's call for $670 billion in tax cuts to stimulate the economy, particularly the proposed elimination of the tax on stock dividends, has drawn poor reviews from several of the Senate Democrats who supported Bush's across-the-board rate reductions in 2001.

And the two Republicans who dissented then, Sens. John McCain of Arizona and Lincoln Chafee of Rhode Island, reacted cooly this time as well.

"In June 2001, I voted for the president's tax plan. It was truly a different time," Sen. Dianne Feinstein, D-Calif., said Thursday as she and Chafee announced legislation to block scheduled reductions in the top income tax rate as long as the government runs a budget deficit. Feinstein pointed to the terrorist attacks, the prospect of war with Iraq, revelations of corporate fraud and the threat of recession as evidence of changed circumstances.

Tax cuts aside, Bush's decision to renominate U.S. District Judge Charles Pickering to a vacancy on the appeals court prompted a sharp attack from Democrats who kept his appointment from coming to the Senate floor when they were in the majority last year. Democrats hinted at a filibuster now that they are in the minority.

Pickering was one of 31 judicial nominations that Bush resubmitted after Democrats blocked them, and the most controversial. So much so that some Democrats who attacked the Mississippian's record on race relations last year seemed eager for the opportunity to return to the subject, particularly after Senator Trent Lott was forced to give up his post as Majority Leader.

Lott touched off a political maelstrom last month after speaking warmly of the segregationist presidential campaign that former Sen. Strom Thurmond ran in 1948.

"There will be a rich debate on the Senate floor, I can tell you that," Democratic Leader Tom Daschle of South Dakota said when Bush's appointments were announced. "You're going to have those who favor civil rights on one side, and those who have a lot of explaining to do on the other side."

In a White House rebuttal, spokesman Ari Fleischer said, "This has nothing, nothing to do with race and everything to do with the ideology of a few liberal Democrats who oppose a man who has bipartisan support."

Senate rules permit Democrats to filibuster any nomination, and the White House and the new Senate Majority Leader, Sen. Bill Frist of Tennessee, would need 60 votes to cut off their delaying tactics. Republicans have 51 seats in the new Senate, to 48 for the Democrats and one independent.

Many lawmakers in both parties favor tax cuts to stimulate the economy, and the battle over the legislation will unfold in both houses of Congress. The president campaigned for his plan during the day with a visit to a flag factory in suburban Virginia, an example of a small business he said would be helped by his proposals.

Rejecting Democratic arguments that his prescription favors the wealthy, Bush repeatedly described the proposals as fair, and said, "I mean, this is a plan to encourage growth, focusing on jobs."

He cited an administration estimate that the proposal would create 2.1 million new jobs over the next three years, and added, "That's good for the American people. It's good for our economy."

Bush's plan to eliminate the tax on dividends drew a polite challenge from one participant at a roundtable discussion, Don Lucas, a 74-year-old retired accountant. He told Bush he approved of his overall growth plan but thought the current system of taxing dividends is fair.

"That's the debate," the president replied.

Fleischer told reporters that some Democrats took time to swing behind the president's tax cuts two years ago. "If you recall in 2001, Democrats didn't support it in the beginning … but they emerged there toward the end," he said.

Bush's tax cuts moved quickly through the GOP-controlled House two years ago, and Speaker Dennis Hastert, R-Ill., told reporters this week the new proposals would "move rather quickly. I suspect it will look pretty much like the president asked for," he said.

House Republicans hold 229 seats, to 204 for the Democrats, one independent and one vacancy.

In the Senate, rules permit Republicans to bring the tax cut legislation to a vote without threat of filibuster. But with only 51 seats and little margin for error, the White House may have to accept major changes as the price for passage.

Democratic aides, speaking on condition of anonymity, said none of the party's rank-and-file senators expressed support for Bush's plan at a closed-door meeting earlier in the week.

Apart from Feinstein, Democratic Sen. John Breaux of Louisiana, a supporter of Bush's tax cuts in 2001, has said the proposals on dividend taxation will have to be changed.

And Sen. Blanche Lincoln, D-Ark., who also voted for Bush's cuts two years ago, issued a statement this week saying, "I do not agree that the President's plan on corporate dividends should be enacted under the guise of economic stimulus, especially considering that only 7.8 percent of Arkansans receive any dividend income."

For the same amount of money, she said, "we could do a number of other things which would truly spur the economy."